*This blog post was originally posted on December 22, 2020. It was updated on January 4, 2021.
After eight months, Congressional leadership secured a deal for another COVID-19 relief package, as well as come to an agreement on annual defense funding and an overarching budget to fund the federal government through September 2021.
The $900 billion COVID-19 relief bill includes a handful of items that will benefit businesses and individuals:
- $300 billion in additional funding for the Paycheck Protection Program (PPP)
- Restaurants will be able to draw on PPP a second time at 3.5x monthly payroll (vs 2.5x for other sectors)
- This legislation also enacts a per-location 300 employee cap vs. a 300 all location cap for other industries.
- PPP loans will now be tax-deductible
- This includes expenses such as payroll, utilities, rent, and mortgage interest
- No COVID-19 business liability language was included
- Business meals are now 100% deductible for 2021 and 2022
- Short term changes to SBA (non-PPP) Lending Programs
- Increases 7(a) loan-guarantee to 90% with no fees
- No fees for 504 loans
- Extends CARES Act principal and interest waiver for new and existing 7(a), 504, and micro-loans
- For loans taken prior to the CARES Act, allows three additional months of principal and interest paid by the government; restaurants authorized to take an additional five months beyond the three
- $300 boost in weekly unemployment benefits for 11 weeks
- $600 stimulus checks will be distributed to most adults and children
- Smaller amounts of funding were provided to support schools, vaccine distribution, and hospitals
- No funding was allocated to provide relief to state or local governments
- This means that there will be no additional money for the state or county to hand out beyond what has already been allocated
In non-COVID related legislation, the federal budget added up to $1.4 trillion and, thanks in part to U.S. Senator Roy Blunt, it includes a new program that will help establish partnerships between the U.S. Department of Veterans Affairs and higher ed initiatives like Mizzou’s NextGen Precision Health Institute.
As always, Chamber staff will continue to monitor and update members on legislation impacting their businesses. For questions regarding PPP or SBA loan programs, please consult your financial advisor or institution.